Homebuilders Sidestep Selloff on Bets Mortgage Rates Will Drop After Fed Rate Cut
By Yasin Ebrahim
Investing.com – A sea of red has washed over Wall Street, but homebuilders are standing firm as the Federal Reserve rate cut is expected to push Treasury yields to record lows and, by extension, mortgage rates even further and prop up housing demand.
KB Home (NYSE:KBH), Lennar Corporation (NYSE:LEN) and PulteGroup Inc. (NYSE:PHM) were up more than 1% today.
U.S. mortgage rates, which are at their lowest average since 2016, tend to track moves in the United States 10-Year.
In the aftermath of the surprise Fed rate cut, 10-year Treasury yields fell below 1% for the first time ever.
"Lower rates provide an opportunity for lower-cost borrowing including for mortgages which support refinancing and prospective homebuyers,” said Mark Hamrick, Bankrate’s senior economic analyst. "For savers, it will remain important to shop around for the best rates."
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